in saying that they'll cough up rather than risk bad press - BUT all this came from an OFT investigation that RECOMMENDED that bank charges shouldn't exceed £12. There was nothing ever that said they were illegal. Specifically, it said that "charges of over £12.00 could be deemed unlawful"
If you've signed a contract, you've agreed to those charges, you will have only been charged if you breeched the contract. If you don't want charges, manage your account better!

I spoke to my branch manager and asked if they have closed anyone's account so far or threatened them with anything, and she said no - basically they have just been refunding it as it's cheaper than going through the small claims court

at the moment, current accounts are free, interest on credit aside. Banks fund the costs of well maintained accounts by charging the poorly maintained ones. (Something hilariously and transparantly illegal, but it's how they've worked for years).

Some are already introducing annual fees for accounts and credit cards, in light of reclaimed fees.

do that as the first one that does will haemorrage customers at a vicious rate so it's not worth it to them. The bank that does not introduce charges will have all the customers. They won't be able to team up either - anti competition laws will see to that.

adding annual fees to credit/current accounts with a low level of activity, in order to maintain.

From a recent article:

" Another impact of any move by the OFT to impose a price cap could be banks changing their pricing structure to make up for the lost revenue.

"If there were to be a reasonably sizeable change (by regulators) then you would probably see a change from some of the players in the UK market," Eric Daniels, chief executive of Lloyds TSB, said on Friday.

Daniels said that could see banks follow other countries, where customers typically pay a monthly fee for a standard current account.

"With over 50 million current accounts in the UK the introduction of ATM charges, low use charges or administration fees on authorised overdrafts could more than offset any impact," Credit Suisse's Pierce said.

HSBC became the first major UK bank to say it will start charging for a current account when its online banking arm, First Direct, imposed a 10 pounds per month fee for many customers last November."

If the industry is saying it will happen, it's highly likely to happen.